Hatch, Matheson fight against Obamacare tax

Politics • Consumers ultimately will get hit with a higher cost through increased premiums, they say.

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This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Washington • Behind heavy wooden doors in the bowels of the Capitol, four members of Congress joined with a handful of small business owners on Wednesday to fight against a piece of the Affordable Care Act they believe will hurt small businesses.

"In just six months, health insurance companies will be whacked with a tax that will be passed on to consumers in the form of higher premiums," said Sen. Orrin Hatch, R-Utah, an aggressive opponent of the law known as Obamacare and one of the lead co-sponsors of a bill to repeal the tax.

The health insurance tax, or HIT, is really a fee the federal government will soon charge health insurance companies for every plan they sell to individuals and businesses that are not self-insured. Since most large companies are self-insured, opponents say insurance companies will pass along the costs to small businesses.

Revenue from the fee will help pay for the expansion of healthcare coverage under ACA, through Medicaid and insurance subsidies. The concern for some members of Congress, including Hatch and Rep. Jim Matheson, D-Utah, is that this tax could stifle economic growth and result in higher insurance premiums.

"Over the next 10 years this tax will impose $102 billion at least on businesses and their employees," said Hatch, "diverting money that could be used to pay higher wages, new hires, better benefits and investments back into their businesses."

Hatch and Sen. John Barrasso, R-Wyo., are sponsoring a bill to repeal the insurance fee, which has the backing of 21 other Republicans.

Rep. Charles Boustany, R-La., and Matheson are leading the effort in the House, which is backed by Utah's three Republican House members and has a total of 225 co-sponsors, enough for it to pass the House.

The four main sponsors addressed the media at the event staged by the Stop the HIT coalition, which represents 35 employer groups across a broad range of industries, to highlight the six-month countdown to the provision's introduction.

The event was held on the same day as the 39th vote in the House to dismantle part of Obamacare. The Democratic-controlled Senate and President Barack Obama have rebuffed every effort to chip away at Obamacare thus far, and are likely do the same this time around.

Matheson is one of just seven Democrats to support repeal of the insurance fee.

"Admittedly there are more Republicans than Democrats as co-sponsors right now," Matheson said, adding that he is confident more Democrats will sign on. "I think more folks on my side of the aisle as well are understanding the impact of this tax."

However, Paul Van de Water from the left-leaning Center on Budget and Policy Priorities says the impacts have been overblown and he backed up his testimony before Congress in May with projections from the nonpartisan Congressional Budget Office.

"Claims that the health insurance tax in particular, or health reform in general, will kill jobs are unfounded," he said. "CBO foresees a small net reduction in labor supply, primarily because some people who now work mainly to obtain health insurance will choose to retire earlier or work somewhat less, not because employers will eliminate jobs.

Matheson's main concern with the HIT is that individuals and small businesses are being singled out.

"This is purely a revenue raiser. There is no policy implication in structuring the tax the way it was structured," he said. "Why we're focusing on small businesses and individuals to pay this doesn't seem very fair to me."

Matheson did not offer any solution for where the Obama administration could find the extra money needed to pay for the healthcare system expansion, hinting at his checkered history with Obamacare. He first voted against the Affordable Care Act becoming law back in 2010, and since then has voted both for and against repeal of certain parts of the law.

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